Friday, 26 October 2018

Brexit: the sovereignty thing

The modern dilemma of globalisation is how we reconcile democracy with the maximisation of trade. Enhancing trade and the profitability of value chains is now more centred on regulatory harmonisation and standardisation than tinkering with tariffs. That obviously has ramifications for national sovereignty and it is the issue that has defined the Brexit debate since the beginning. The philosophical debate of 2018 looks more or less the same as that of 1975.

Remainers will scoff at sovereignty. They always have. They view it as a quaint and obsolete notion and to a point they are right. We shall soon find as we leave the EU there are other binding obligations where Brexit brings no remedy - and that which has been done in Europe is now going global.

I take the view that there are levels of compromise. My favourite line is that I'm not going to go to the barricades over aubergine marketing standards. Life is too short and most of the time these things don't really matter. For whatever downsides there may be, the wealth of goods now available to us because of the standardisation process makes it worth it.

Some issues though, are more contentious than others. Food labelling tends to be a political football particularly in the wake of food scares or new allergies. Then there are certain cultural factors to take into account. There is a landmark case Efta case where Norway wanted to restrict a type of alcopop marketed at young people where the court ruled that the domestic restrictions amounted to trade protectionism. Food and drink will always be contentious.

Similarly we look to international labour standards which are designed to create a level playing field. Seafarers in the west struggle to compete against untrained and inexperience Filipino crews and so the International Maritime Organisation in conjunction with the EU and the International Labour Organisation is seeking to insert certain safeguards into modern managed trade agreements.

Though the intent is laudable, the issue of labour rights then becomes a top down affair and when it becomes a matter of trade, it becomes a matter of binding agreements and yet another restraint on sovereignty. Thought the trend is toward beefed up labour standards, seeking to penalise exploitative ship operators, if rights and standards can be traded up they can also be traded down - without consent. This happens in international arenas, EU and above, far beyond the reach of democracy.

Here is where we see measures such as the posted workers directive and the agency workers directive, which in my view have done more harm than good in that they have created unfair competition and eliminated labour market fluidity making it harder to find and keep secure work. It disproportionately affects the young and the bottom decile. What makes the EU obnoxious is that it is judged by its intentions not by its outcomes. This is why I tend to find remain activists actually considerably thicker than the average Kipper.

In this dilemma there are the hyper-globalists and free traders generally describing themselves as liberal - and then there are the protectionists who tend to favour national sovereignty. There is a place for both and every issue must be weighed up on its own merits. Neither camp is can claim superior wisdom.

As pointed out previously, the liberalisers argue that liberalisation of trade very often has no net impact on jobs, where the word net is doing an awful lot of work to disguise a great deal of disruption and displacement which again is usually felt the most acutely by the bottom decile. This is ultimately the driver of so-called populist movements. The latest UNCTAD publication alludes to this.

There are obvious advantages to a global rules based order to curb the worst excesses of predatory trade practices. Common approaches to liberalisation also has its distinct advantages. With the UK being the second most open market in the rankings of the Government Procurement Agreement we have been the beneficiary of massive foreign investment. The histrionics in respect of TTIP opening the doors to US healthcare companies somewhat overlooks the fact that under the WTO GPA, much of the government estate is already up for grabs.

Here we are going to find that those rejecting the EU on the grounds of its "neoliberal" credentials will find Brexit does not make the issue go away. Any future FTAs are likely to bring demands for further liberalisation and increased access to UK government procurement projects. The trend of privatise subcontractors does not end with Brexit - which many, including myself, increasingly see as an unhealthy development as services and utilities drift further away from public accountability and local control.

Of course, we could go to the other extreme where we fetishise sovereignty to such an extent that we lose all of the benefits of openness - which the debate surrounding the single market now demonstrates. Neither extreme is good. The so-called "neoliberal" world order is drifting toward the centralisation and privatisation of technical governance and regulation which is certainly not good for democracy - especially when many of the corporates involved have more clout that most countries.

For all that we are told that openness and private sector involvement is better for our wallets, it is not necessarily good for democracy and many would point to PFI contracts as a totem of corporate plunder. They are not wrong.

This globalisation dilemma is one this blog has wrestled with for some time. I am an advocate of the WTO and I think it needs to be strengthened, reformed, improved and democratised - but if we couldn't do that with the EU, it seems a little to ambitious to think we can do it globally. The WTO is less offensive in that it is not a surpanational authority and there is not much wrong with intergovernmentalism among like minded nations.

In the end, though, I come down on the side of national sovereignty. Though it is certainly not a binary consideration, with huge grey areas where, unarguably, there are benefits to binding international accords, the principle itself must always be at the forefront of our considerations and must be keenly defended.

Remainers are absolutely right to warn of the dangers of a a WTO Brexit. Leaving the EU without a deal most certainly is dangerous and uniquely damaging to the UK. Who, though, could have been so crass as to make the UK so vulnerable in the first place? Only a fool. Thanks to the Lisbon treaty all of our external relations are tied up in a single treaty instrument. That created a grave systemic risk.

This is something that was done to us with the arrogant assumption that integration would be irreversible and permanent. As much as anything of a political nature is never permanent, it certainly isn't when done without consent. That always made Brexit a question of when rather than if.

There is then the human factor. Though we may be advanced animals in the process of mastering space travel and quantum physics, we are still essentially a tribal animal and we seek out communities based on shared values, a common language, a common history and a shared destiny. This is not something that can be imposed without consent. If it is be be a genuine demos then it must evolve of its own accord.

In the end I think the EU will fail because of its fundamental lack of legitimacy. Polls in the last couple of years have tended to favour the EU across Europe but these such polls are fickle and the EU is about to face a number of stresses as Eurozone members wake up to how much of their democracy they have ceded to the technocrats.

What is needed for the future is institutions and structures for the facilitation of trade but ones which ultimately respect democratic expression. The EU is no respecter of sovereignty nor are its voting rituals a genuine expression of people power. The Utopian liberal ideal will always trample on national and local democracy. The solution to any crisis in their eyes will only ever be to confiscate ever more powers to remove the roadblocks to the completion of their grand designs.

This is why, as we leave the EU, we need a new constitution for the UK and one which safeguard against making the same mistakes. Generations of politicians got carried away with their utopian ideals for whom the ends justified the means - cutting corners with democracy and never seeking consent. If we are to have binding agreements that encroach on sovereignty then the risks must be distributed and there must be safeguards.

The essence of a democracy is that power belongs to the people. In a representative democracy (flawed though it is) that power is on loan to politicians to exercise in our name. That will always carry risk which is why we must move to more direct democracy much like Switzerland. Constitutional questions must always be put to a public vote. But the essential point is that the powers loaned to politicians are not theirs to give away.

There is no solution to the intractable dilemma of globalisation and there will always be a conflict between openness and sovereignty and democracy will always be the fly in the ointment of schemers. But for whatever gains there may be from standardisation and harmonisation, there must also be public involvement and legitimate consent. Without that we only ever widen the gulf between the govern and the governors which is how we got here to begin with.

It is not a question of national sovereignty, rather it is a question of the people's sovereignty and having a system that fundamentally recognises that politicians are our servants, not our masters. The men who connived to ratify the Lisbon treaty and opened our borders did so in the belief that their judgement was superior - knowing that if they sought consent they would not get it. It is that singularly betrayal that has poisoned politics ever since and has shattered the country. That is why sovereignty matters and that is why any new constitution should be designed to ensure they never get to do it to us again.